Tax Breaks for Charity Volunteer Workers
Many people don’t realize there are tax benefits to being a volunteer. In fact, volunteers for a 501(c)(3) tax exempt-organization are entitled to receive deductible charitable contributions. To qualify, the amount of the deduction must directly relate to the charity and you must not have been reimbursed for any expenses.
Common out-of-pocket costs that can be claimed include:
- Travel expenses while performing volunteer services away from home, including round trip travel costs, lodging, meals, and taxis. You cannot deduct any expenses that were incurred for personal reasons or for lobbying activities.
- Costs related to entertaining other people on behalf of the charity, but not your own meals or entertainment.
- Car-related expenditures such as gas and/or oil. If you prefer, you may deduct a flat per-mile amount (currently 14 cents). In both scenarios, you may also deduct parking fees and tolls.
- The cost of buying and cleaning a uniform used for charity work.
What Deductions Aren’t Allowed
Unless you can substantiate it with a written document from the charitable organization, you may not deduct a contribution of $250 or more. The organization’s acknowledgment should set out:
- How much was contributed?
- A description of any property contributed.
- Whether you received anything in return for the contribution.
For volunteers, this can present a problem because you are contributing on behalf of, not directly to, the charity. There are solutions, including having the charity pay for any expenses and then you “reimburse” it. You may also ask the charity to explain in writing why you were needed out of town and/or had substantial out-of-pocket expenses.
In all cases, make sure to maintain detailed records of all your costs.
Volunteering your time to a non-profit charity organization is a great way to give back, but you’re also entitled to recover some of the costs you incur for doing so. The actual tax law governing deductions for charity volunteer works is more complex than set out here, so if you’d like to learn more about the deductibility of your charity-related expenses, contact KEGA CPAs online today or call us at 772.231.6902 to schedule a consultation.